Social Media and Customer Relationship Management:
How Businesses Can Use Facebook and Other Social Media to Improve Customer Relationships
By Jane Anderson, Alex Bodzasy, Michael Graves, Heather Henderson & Robin Tippett | January 31, 2010
Since the launch of MySpace in 2003 and Facebook in 2004, social media has exploded in popularity.
With over 4.4 million active users in Canada alone (MySpace, n.d.) and well over 137 million around the world (Jones, 2006), MySpace, the original social networking site, has been overtaken in popularity by Facebook, which has more than 300 million active users worldwide (Facebook, 2009). It is no wonder, with numbers like these that companies are starting to leverage social media to raise awareness of their companies while utilizing the information available for Customer Relationship Management.Defining Facebook and Social Media
Social media is a way for anyone and everyone with an internet connection to share ideas, thoughts and opinions with others. Whether it is used purely for entertainment or as a way of advertising businesses, social media has taken the internet by storm. Social media comes in many different forms: blogging, podcasting and social networking, to name a few.
Facebook introduced people to a new way of connecting and staying in contact with one another, while incorporating fun things like games and photo sharing. This resulted in Facebook becoming one of the most popular websites on the Internet (Facebook, 2009). Facebook allows you to share an abundance of information with your friends, and even the world. This means Facebook has in-depth information on millions of people all over the world, from different markets, beliefs, ages, races, religions, even interests. This is information that can be utilized by a business in a number of ways, whether it is by doing a brief background check on a potential employee or to determine a certain market's interests and/or current trends.
Using Social Media in B2B and B2C
Facebook is primarily used for personal entertainment by consumers; most users sign in to stay in contact with friends and family, getting in touch with old friends along the way and even making new ones. To take part in the Facebook community, a consumer must create an account and include an abundance of personal information that the consumer has control over. Although privacy concerns are growing (Baran, Galka, & Strunk, 2008), many users do not control the privacy settings closely, which is why a social networking site like this can be extremely beneficial to a business that is trying to find out more about their consumers.
Another well known social networking site is Twitter, which people are now turning to as an effective way to reach out to businesses or businesses reaching out to consumers. Twitter took the simple idea of status updates from Facebook and created a domain for people to simply post their current thoughts, feelings or plans (Milstein, 2009). From big brands to local stores, people are finding value in the connections they make with Twitter. An example of this is the construction people working on the Empire State Building, who twittered that they were craving an ice cream delivery. The New York local chain Tasti D Lite was there to listen; they tracked the workers down and made sales (Twitter, n.d.).
There are a number of examples like this, big and small, that show how well connected companies can be to consumers, thanks to the benefits of social networking. Websites like these are becoming one of the most powerful online marketing tools, as it is a way of getting timely information out to those who want it as soon as they need it.
Businesses Using Social Media
As mentioned above, social media takes on few different forms, from blogging, podcasts to social networking such as Facebook. Many organizations are using these tools to create buzz about their brands and building customer relationships.
Dell Outlet used Twitter to raise awareness of the division because they do not have the time to develop an advertising campaign to sell refurbished equipment and other products. These particular products need to be sold promptly (Twitter, n.d.). Ricardo Guerrero, an employee of Dell, had attended a South by Southwest conference when he was first exposed Twitter. He thought that this was a great way to deliver the information to the customers in a cost effective way.
Stefanie Nelson, the Manager of Demand Generation at Dell Outlet said "We thought, great, this has a really short lead time and will let us communicate our message effectively". As the company posted advertisements and deals they had noticed that their customers were responding and wanted to ask questions. Dell moved from a one-way communication to responding to customers on Twitter. They even offered Twitter deals for those that have accounts. Offering coupons and responding to customers on Twitter has spread brand awareness and driven sales: Dell Outlet attributes 3 million in revenue to its Twitter posts (Twitter, n.d.).
The National Free Press
The National Free Press has used social media to leverage the brand since its conception in 2006. Trevor Hill, Publisher, has used various parts of the Facebook social networking site to promote his news stories, through RSS feeds (Really Simple Syndication) sent directly to subscribers on Facebook and a page on Facebook dedicated to the news site (Hill, 2009).
In the last few months, however, The National Free Press has taken a new approach to social media. With the launch of The Free Press Community in July, a new Facebook feature was integrated into the sign-in process. With Facebook Connect, users of The Free Press Community can sign up with a few mouse clicks through their Facebook accounts. Since the launch of the community, more than half of all new users have signed up using the Facebook Connect feature, which Trevor Hill acknowledges as partially responsible for its growth.
"[Facebook Connect] simplifies the sign up process for users who have 'Registration Fatigue'. All too often, internet users are asked to fill in endless boxes of information, just to access features of a site, but now, with two clicks they are connected and ready to interact with other users on our community."
How has this helped The National Free Press with CRM? "Because it's easier for users to sign up, we are getting a more accurate picture of our visitors. People who may have browsed our site but never signed up are now more likely to, which helps us keep more detailed statistics on who accesses our site, how often and why."
In addition to the simplified registration, Facebook Connect makes it possible for website users to broadcast information back to Facebook (Facebook, 2009). When a user fills in a poll, the results can be sent back to his or her Facebook page, thereby sharing that information with his or her friends and increasing awareness of the site. The National Free Press intends to integrate more of these features in the coming months.
The Ale House
The Ale House is a popular bar in the hub of Kingston's nightlife. They primarily target the students of Queen's University, with the students of St. Lawrence College as a secondary target. Ale House is a popular destination because of the events they hold such as: concerts, up-and-coming DJs, community events, and all ages nights. What differentiates them from their competitors is that this bar primarily does all the live music for Kingston bars.
With 19 to 25 year olds as their target market, Ale House had to come up with some clever, inexpensive ways of advertising to the younger generation. With technological advancements, and social media sites becoming increasingly popular, Ale House had no choice but to start advertising on those sites (Hogan, 2009). Ale House now has two Facebook groups, one for employees, one for customers; they have banners on Facebook, as well as a Twitter account. Social media is the primary method that Ale House uses to get their message into the heads of the customers and advertise upcoming events.
The examples discussed above show how companies have been able to use social media with little or no expense, which is a very attractive marketing approach for small and medium enterprises. Clearly, social media is an excellent resource for companies to manage customer relationships, as well as inexpensively raising the awareness of their brand and stimulate sales. As marketing through social media continues to grow in popularity, companies who do not adopt social media run the risk of appearing outdated or obsolete.